Construction work for a nuclear power plant in Poland continues

23.06.2016

PNEP still valid

Following the change in government in Poland in autumn 2015, it was very much doubted whether the Polish Nuclear Energy Program (PNEP) would be implemented. In recent weeks, however, the Minister of Energy (MoE), Mr. Krzysztof Tchórzewski, has repeatedly declared that the construction work for a nuclear power plant in Poland will be continued. The Ministry of Energy is currently conducting an intensive evaluation of the PNEP; a report on its implementation is expected to be presented to the Board of Ministers by the end of June 2016.

An official from the MoE commented as follows: “Nevertheless, it is necessary to modify the project to make it profitable and economically rational. The conceptual phase of this project should be completed in the coming months.”

The investment is being coordinated by a special purpose vehicle, PGE EJ1, that consults with major consortium partners managing nuclear technology such as Arevy, GE Hitachi, Westinghouse, SNC Lavalin and Kepco. More than 200 Polish companies, including many with experience from similar projects in France and Finland, have agreed to participate in the construction process too.

The tender procedure is planned for completion for 2019. The commissioning of the first reactor is expected in 2029.

Location

Several possible locations were initially considered in 2011. Presently, only two locations are being considered - the town Lubiatowo-Kopalino (in the municipality Choczewo) and the town Żarnowiec (in the municipalities Gniewino and Krokowa).

"The company has decided to conduct environmental testing at these two selected locations in order to ensure the effectiveness of further works and to meet all legal requirements," was the statement from PGE EJ1.

The final selection of the location is expected by the end of 2017.

Financing model

So far, the system of financing this nuclear investment has been based on a “contract for difference”, prepared on the basis of the British system. Because of many financial and legal issues with respect to this system (e.g. Austria filed a lawsuit against EU Commission over a UK nuclear power plant), the Polish government is also considering the use of the “Finnish model of financing.

During the recent press conference on 15 June 2016, the MoE stated that the financing projections for the Polish nuclear power plant, which have been presented to him in terms of the differential contracts, are not acceptable because they are far too expensive.

The construction costs for the first Polish nuclear power plant are estimated at PLN 40-60 billion. This would be a serious burden to the State Treasury; these costs will also impact the state-owned companies’ budgets.

The Polish government is intensively seeking solutions to resolve this issue.

Are the Chinese going to invest in PNEP?

During the recent visit of the Chinese President to Poland, several agreements on cooperation between Polish and Chinese companies for large infrastructural projects, including energy projects, were signed.

"Chinese companies have already been involved in many energy investments in Poland, such as the construction of electricity power stations. Many of them are just discovering opportunities offered by your country. I am convinced that in the not too distant future cooperation will be much more developed," said the Chinese Ambassador in Warsaw.

The speculation about the possible involvement of Chinese capital in the Polish nuclear programme will be verified in the nearest future.

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